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COMSATS Institute of Information Technology

Abbottabad Campus
Course Code: ECO300

Instructor Abdul Ghafoor Khan Email

Credit 3 (3,0) Program BS Electrical Power
Hours Engineering
Office A Block. Room No: Semeste Fall 2017
308 r

Course Objective
Engineering management relies on the knowledge of engineering economics to be able to
evaluate projects from a financial perspective. Optimizing financial performance of a project
is a key responsibility of the engineer in the decision making process. The basic concepts of
the time value of money and economic equivalence is applied throughout the course. Each
engineering problem/project progressively incorporates different cash flows, the cost of
funds, capital, operational and maintenance costs, salvage value, depreciation, amortization,
and taxation. Students learn to apply different economic analysis methods – like present
worth, annual-equivalent worth, rate-of-return, life-cycle cost, cost/benefit etc – in
evaluating the economic viability of a project, as well as the comparison of mutually
exclusive alternatives. The course also introduces concepts of replacement decisions, capital-
budgeting decisions, and project risk and uncertainty.

Theory Course Outline

This course is designed to present engineering students the major concepts and techniques
of engineering economic analysis that are needed in the decision making process. The
emphasis of this course is on the analytical analysis of money and its impact on decision

Recommended Books
Engineering Economy by William G Sullivan, Elin M. Wicks and C. Patrick Koelling, 16 th Edition
Contemporary Engineering Economics by Chan S Park, 4th Edition.

Week Tentative Topics
Week 1 Introduction to Engineering Economy
Week 2 Cost Concepts and Design Economics
Week 3 Cost-Estimation Techniques
Week 4 The Time Value of Money
Week 5 Evaluating a Single Project
Week 6 & 7 Comparison and Selection among Alternatives
Week 8 Depreciation and Income Taxes
Week 9 Evaluating Projects with the Benefit–Cost Ratio Method

Week 10 Price Changes and Exchange Rates

Week 11 Breakeven and Sensitivity Analysis

Week 12 &
Replacement Analysis
Week 14 Probabilistic Risk Analysis
The Capital Budgeting Process, Decision Making Considering,
Week 15
Week 16 Presentations

Assignments (4 Minimum) 10 % weightage
Quizzes (4 Minimum) 15 % weightage
1 Sessional Exam 10 % weightage
2nd Sessional Exam 15 % weightage
Terminal Exam 50 % weightage
Total 100 %